Consumer Behavior Final

Perceptual Mapping

1. Consumers judge the similarity of alternative brands. (Usually begins with consumers looking at possible pairs of brands and indicating which pair is most similar, second most similar, and so on, until all are ranked). 2. A computer processes these ranking to create a perceptual map. No evaluative criteria is specified by the consumer. This unnamed evaluative criteria are the dimensions of the configuration.

Decision sequence

1. Outlet First, brand second 2. Brand first, outlet second 3. Simultaneous

Outlet Selection process/ steps

1. Recognizes a problem that requires outlet selection 2. Engages in internal and possibly external search 3. Evaluates the relevant alternatives 4. Applies a decision rule to make a selection

5 elements of relationship marketing

1.Developing a core service or product around which to build a customer relationship 2.Customizing the relationship to the individual customer 3.Augmenting the core service or product with extra benefits 4.Pricing in a manner to encourage loyalty 5.Giving incentives to employees so that they will perform well for customers

Attribute-based Choice

A choice that requires the knowledge of specific attributes at the time the choice is made, and it involves attribute-by-attribute comparisons across brands

relationship marketing

An attempt to develop an ongoing, expanding exchange relationship with a firm's customers. Includes: Databases, customized mass communications, advanced employee training and motivation

Rational Choice Theory

Assumes that the customer has sufficient skills to calculate which option will maximize his/her value (identifying one optimal choice, collects information levels of attributes across alternatives, applies the appropriate choice rule, and the superior option is revealed)

indirect research methods (evaluative criteria)

Assuming customers will not/cannot state evaluative criteria, these include projective techniques that allow the respondent to indicate the criteria someone else might use, or perceptual mapping in which the researcher uses to determine dimensions underlying consumer evaluations of brand similarity)

Inept Set

Brands found to be completely unworthy of further consideration

Evoked Set

Brands or products consumers will evaluate

outlet location and size

Closest store and larger rather than smaller outlets

Internal Search

Consumers search long-term memory to determine if a satisfactory solution is already known

Post-purchase consumer behavior

Dissonance, consumption guilt

Dissonance

Doubt or anxiety, can be increased or decreased due to the: degree of commitment or irrevocability of the decision, importance of the decision to the consumer, the difficulty of choosing among the alternatives, and the individual's tendency to experience anxiety.

Retail advertising

Emphasizing service, selection and other benefits, not price

Affective Choice

Evaluations for this choice generally focus on how they will make the user feel as they are used (ex. dress shopping)

Awareness Set

Evoked Set, Inept Set, Inert Set

External Search

If a resolution isn't reached through internal, then the search process is focused on relevant external information

Satisfaction can have 4 outcomes: Increased use, repeat customers, brand loyalty, WOM.

Increased use, repeat customers, brand loyalty, word of mouth

Decision Rules for Attribute-Based Choices

Lexicographic, Compensatory Rules, Elimination, Disjunctive, Conjunctive [Help to remember: LCEDC - Lexi-Could Eliminate (the) DECISION Codes]

Internal (memory sources) passively acquired

Low-involvement learning

Marketing tactics/programs that effect decision making

Outlet image, retailer brands, retail advertising, outlet location and size

Internal (memory) sources actively acquired

Past searches, personal experience [Independent groups (magazines, consumer groups, government agencies), personal contacts (friends, family, others), marketer information (sales personnel, websites, advertising), experiential (inspection or product trial)]

Retailer brands

Private Labeling, high quality and reasonable price

Metagoals in Decision Making

Refers to the general nature of the outcome being sought (either 1. Maximizing the accuracy of the decision, 2. minimizing the cognitive effort required for the decision, 3. Minimizing the experience of negative emotion, or 4. Maximizing the ease of justifying the decision)

Factors affecting external search:

The more alternatives, larger price range, store concentration, information availability, price, differentiation, and positive products, social status, perceived risk, time availability, pleasant surroundings, and physical/mental energy the more external searching that will be done - Learning & experience and purchasing for yourself decrease the external search. - Shopping orientation, age and household lifecycle, product involvement, and social surroundings are mixed.

Evaluative criteria

These are typically product attributes associated with the benefits desired by customers. Criteria can differ in type, number, and importance (imp. influenced by how, where and when the product is used, the competitive context, and the advertising effects).

Lexicographic Rule (decision rules for attribute based choices)

This decision rule is one in which the CUSTOMER RANKS the criteria in order of importance, then selects the brand that performs best on THE MOST important attribute.

Compensatory (decision rules for attribute based choices)

This decision rule states that the brand that rates the highest on the sum of the CONSUMER'S judgements of the relevant evaluative criteria will be chosen.

Importance determined (Evaluative criteria)

This is also measured by either direct or indirect methods (as is evaluative criteria). The most common DIRECT method is the CONSTANT SUM SCALE. The most popular INDIRECT method is CONJOINT ANALYSIS.

Churn

This is turnover in a firm's customer base. It costs more to get new customers than to retain existing customers, as new customers are not as profitable as long-term customers.

Surrogate Indicator

This is used to indicate another attribute when consumers have difficulty differentiating and identifying complex brand criteria (such as quality or durability). Example: when choosing for quality, consumers often use these which may include price, advertising, warranties, brand, or country of origin.

Conjunctive (decision rules for attribute based choices)

This rule establishes a minimum required performance for each evaluative criterion. (Selecting from the brands that meet or exceed minimum standards)

Elimination (elimination-by-aspects) (decision rules for attribute based choices)

This rule is a process. 1. evaluative criteria are ranked in terms of importance. 2. a cutoff point for each criterion is established. 3. (In order of criterion importance) brands are eliminated if they fail to meet or exceed the cutoff.

Decision Process

What alternatives exist to evaluate? What are the criteria to help evaluate the alternatives? How does each alternative perform on each criteria

Consumption Guilt

When negative emotions or guilt feelings are aroused by the use of a product or service. Ex. Driving a large car (negative feelings about polluting the earth).

Preference

[Marketing strategies - Search Patterns] Extended decision making with the brand in the evoked set requires a preference strategy. Marketer needs to structure information so brand becomes preferred by target market. (Ex. Mercedes saying "You're not buying a car, you're buying a belief")

Intercept

[Marketing strategies - Search Patterns] If limited decision making and brand is not part of evoked set, objective will be to intercept the consumer during search. Emphasis will be on local media, point-of-purchase displays, shelf space, package design, etc. Coupons can also be effective.

Capture

[Marketing strategies - Search Patterns] Limited decision making generally involves a few brands evaluated on only a few criteria. Brand is in evoked set, search occurs mainly at the point-of-purchase or in readily available media. Objective is to capture as large a share as practical.

Acceptance

[Marketing strategies - Search Patterns] Similar to preference, but target market is not seeking info about the brand. Marketing must attract consumer attention or motivate brand learning. Incentives to try product, long-term advertising to enhance low-involvement learning and use of the internet are useful

Disrupt

[Marketing strategies - Search Patterns] if the brand is not part of the evoked set and the target market engages in nominal decision making, the marketer's first task is to break the existing decision pattern. (Soy products, like Silk and weird organic milk that didn't come from an animal are a good example - tactics: free samples, coupons etc.)

Maintenance

[Marketing strategies - Search Patterns] if the brand is purchased habitually by the target market, the marketing wants to maintain that behavior. This requires consistent attention to product quality, distribution, and a reinforcement advertising strategy.

Attitude-Based Choice

a choice that involves the use of general attitudes, summary impressions, intuitions, and no attribute-by-attribute comparisons are made at the time of choice. (ex. car shopping, "my friend drives a Kia and it runs well..." etc.)

Bounded Rationality

a limited capacity for processing information

6 Marketing strategies based on info Search patterns

acceptance, capture, disrupt, intercept, maintenance, preference

direct research methods (evaluative criteria)

asking consumers what criteria they use in a particular purchase

Inert Set

brands for which the consumer is aware of but basically indifferent toward

Internet Retailing barriers

lack of internet access, credit card concerns, lack of "touch", don't have a debit/credit card, delivery cost too high, don't want to wait for delivery

Way researchers find out about product use

observations, innovativeness (seeing how customers use the product), surveys

outlet Image

perception of attributes

multi-channel retailing

shoppers are consumers who browse and/or purchase in more than one channel. Interaction: Retail store, online and Catalog (ex. Consumers browse online and purchase the product in the store OR browse i the Catalog and purchase online etc.)

Disjunctive (decision rules for attribute based choices)

this rule establishes a minimum required performance for each important attribute (Selecting all brands that meet or exceed the minimum performance level for any key attribute. In this rule, some attributes may be labeled as "not critical" and not be evaluated.)